Former HSBC Executive Convicted of Fraud for Front-Running

By Rebecca Davis O'Brien 

A federal jury in Brooklyn on Monday found a former high-ranking HSBC Holdings PLC executive guilty on charges that he misused information about a client's $3.5 billion currency trade to make millions of dollars for the bank.

Mark Johnson, HSBC's former global head of foreign-exchange cash trading, was the first banker to face criminal charges stemming from a U.S. Justice Department probe into foreign exchange rate manipulations. He was convicted on eight counts of wire fraud and one count of wire-fraud conspiracy; he was acquitted on a ninth wire-fraud count.

Lawyers for Mr. Johnson couldn't immediately be reached for comment. A spokesman for the Brooklyn U.S. attorney's office didn't immediately have a comment on the verdict.

A spokesman for HSBC didn't immediately respond to requests for comment. Mr. Johnson left HSBC earlier this year.

Mr. Johnson, a British citizen, wasn't accused of rigging exchange rates, the main focus of the broader Justice Department probe.

Instead, he and a colleague, Stuart Scott -- HSBC's former European head of currency trading -- were charged in connection with a practice known as front-running, in which someone with advance knowledge of a major market order buys for their own account, then earns a profit when the larger transaction drives up the price.

Mr. Scott, who left HSBC in 2014, is in the U.K. fighting extradition and wasn't tried alongside Mr. Johnson. A lawyer for Mr. Scott couldn't immediately be reached for comment.

(END) Dow Jones Newswires

October 23, 2017 13:43 ET (17:43 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.